Controlling the Trustees - Will the court interfere with the exercise of a discretion of power?
3 important questions on Controlling the Trustees - Will the court interfere with the exercise of a discretion of power?
In Tempest v Lord Camoys, the court will only intervene if the exercise of power or discretion is what?
Improper.
When will the court likely declare the exercise of the trustees' power or discretion void and interfere?
- Trustees blindly follow the orders of the settlor without exercising their discretion to exercise their power (Turner v Turner)
- Trustees chose non-objects (not beneficiaries)
- The exercise of the trustees' discretion is capricious 'irrational perverse or irrelevant to any sensible expectation of the settlor' (Re Mainsty's Settlement)
- The court will not interfere if the trustee acted honestly even if the court reached a different decision. However, the court will intervene if the exercise of discretion was wholly unreasonable (Dundee General Hospitals Board of Management v Walker)
Are trustees obliged to provide beneficiaries with reasons explaining why they exercised power or discretion in a certain way? When can the court interfere? What is the main authority?
Trustees are not obliged to provide a reason, but when they do, the court will enquire into their adequacy. In Klug v Klug a trustee refused to exercise discretion to give trust capital to a beneficiary because the beneficiary was the trustee's daughter who had married without her consent. The court held that the decision was irrational and void.
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